As a reminder, The Small Business Jobs Act of 2010 included an assortment of tax changes generally affecting small business. To offset a portion of the cost of the various tax breaks and incentives in the Act, Congress beefed up certain reporting requirements and penalties, in the hope that the added requirements will generate revenue and lead to more effective tax collection. 

Increased penalties for information returns was one of the changes brought about by The Small Business Job Act of 2010.  The penalties in the tax code for failure to timely file information returns to IRS have doubled and the penalty for each failure due to intentional disregard has increased from $100 to $250 per return. The most common informational returns include the 1099 series of forms that are due to the recipient by January 31, 2012 and due to the IRS by February 29, 2012 for the 2011 tax year.           

To assist the IRS with compliance in this area, two questions have been added to each business income tax return for 2011 which must be answered: 

• Did you make any payments in 2011 that would require you to file Form(s) 1099?
• If "Yes", did you or will you file all required Forms 1099? 

We will be asking you to answer these questions before we file your business income tax return for 2011.  The January 31 due date for the Form 1099 series is quickly approaching and will be here before we know it. Please contact our office if you need assistance with Form 1099 reporting.

Experienced employees of FB&C write the contents of the materials posted on the blogs.  Carefully consider all facts and circumstances specific to your situation before applying information in our blogs and consult your FB&C advisor before acting on any information provided. The information is provided as general guidance and is not intended to constitute accounting, tax, legal or other professional advice.